The Forbes CSR blog covers all topics related to the responsibility companies do or do not have to people and the planet. Should apparel makers that produce goods in China pay more than the going wage? What sort of obligation, if any, do American corporations have when it comes to hiring a racially diverse workforce? What standard of ethical behavior should executives set in their personal conduct? When is a public pledge to save the planet, like BP’s now-infamous “Beyond Petroleum” sloganeering, a public relations ploy as opposed to a meaningful commitment? We welcome contributions and comments from all corners.

4/26/2011 @ 12:02PM79,300 views

The Five Elements of the Best CSR Programs

This is a guest post written by Paul Klein, the founder of Impakt Corp., a Toronto-based advisory services firm that helps large companies align business and social outcomes.

Does your company have what it takes to be a leader? High performance is traditionally measured against key business imperatives including competitive differentiation, sales, attracting and retaining talent, operational efficiency, return on investment and profitability. But that is no longer enough. Today, a new element of leadership is making a profound difference in gauging business performance: corporate social responsibility.

In the last two years, CSR has surged passed its tipping point. “A plethora of research points to a majority of stakeholders agreeing that CSR is a ‘must do’,” says Kristian Darigan Merenda, Edelman’s senior vice president of brand and corporate citizenship. According to Edelman’s 2010 Goodpurpose Study, 67% of consumers say they are more likely to buy products and services from a company if they know it supports good causes,up more than 11% from the year before.

As a key ingredient in business strategy and execution, CSR is playing a central role in helping corporations to be seen as leaders. Astute corporations are allocating increasing internal resources to CSR investments that feature clear objectives and deliver measurable social outcomes.

Campbell’s Canada’sNourish is the first Canadian private sector, not-for-profit product that specifically targets the growing problem of hunger. This nutritious meal in a can, developed by socially conscious Campbell’s staffers, will only be distributed to food banks, not directly to consumers. Nourish is a great example of how corporations can earn respect and leadership status by taking a disciplined approach to CSR.

At the outset, the company’s objectives were clear. According to Campbell’s: “We have a responsibility because of who we are and what we do to take a lead role in alleviating hunger.” The product was conceived and developed by Campbell’s employees who came together to build on their expertise in product development, production, distribution and marketing.

Campbell’s expected outcome for the initiative was to raise awareness for hunger while at the same time setting an example for other food companies to follow, says Philip Donne, the president of Campbell’s Canada. “If we get even one company introducing their Nourish, we will have been successful.”

Research conducted in January by Impakt Corp. revealed that corporations that are considered leaders in terms of business performance take a common approach to CSR. We found five interrelated criteria that form a new blueprint for how corporations can maximize their investments in CSR: business-based social purpose, clear theory of change, quality and depth of information, concentrated effort, and partnering with experts.

1. Business-based social purpose: There have been too many examples of CSR programs that ignore business fundamentals. Leadership-level CSR programs always directly reflect what the business is and what it does. Campbell’s Nourish illustrates how an innovative CSR initiative can reinforce the company’s business purpose and seamlessly leverage its operational competencies.

2. Clear theory of change: CSR is becoming ubiquitous. On the one hand, that’s good news because it proves its business value. On the other hand, it’s getting harder to distinguish one company’s efforts from another’s. CSR leaders develop proprietary approaches to drive measurable social change. 3M Canada’s Healthy Communities program was designed to spark systemic change in the interrelated areas of education, health and the environment by influencing government and academic leaders. The program also engages young people through national partnerships with leading not-for-profit organizations. The Healthy Communities program was recently awarded the prestigious 3M Global Marketing Excellence Award.

3. Quality and depth of information: Merely identifying social priorities for community investment isn’t enough. Leadership comes from providing employees, customers and external stakeholders with a significant depth of information about the social issue through credible research, white papers, videos, stories, social media, and so on. IBM’s Smarter Planet is a best practice in this area. “We support sophisticated projects that lead to a more intelligent, enlightened world,” explains Ari Fishkind , IBM’s public affairs manager for corporate affairs and citizenship. “For instance, through our World Community Grid project, we are helping to develop new solutions to important medical and sustainability issues by providing scientists with unused PC computing power, supplied by volunteers, to enable them to conduct better and faster research.”

4. Concentrated effort: Colin Powell once stated that people are capable of effectively addressing only one objective at a time. He would not be surprised to discover that companies that support multiple social issues don’t move the needle very far on any of them. Leadership is shown by corporations that focus their efforts on one social issue and align all their internal and external resources with this issue. Procter & Gamble focuses on helping children in need around the world. Since 2007, P&G has improved the lives of more than 210 million children through initiatives such as Protecting Futures, whichhelps vulnerable girls stay in school, and Hope Schools,which increases access to education in rural areas of China. “We see programs like Protecting Futures as an investment in the future that helps both children and communities thrive,” says Jeff Roy, Procter & Gamble’s media relations manager.

5. Partnering with experts: Leadership requires establishing a high degree of credibility. This is best done through relationships with social issue experts and not-for-profit organizations. Starbucks hosted a “Cup Summit” at the Massachusetts Institute of Technology to bring together municipalities, raw materials suppliers, cup manufacturers, retail and beverage businesses, recyclers, non-government organizations and academic experts to share ideas for making paper and plastic cups more broadly recyclable. “On the journey to make our iconic coffee cups 100% recyclable, we quickly learned that developing recyclable material is just one part of the complex equation. We had to consider the entire lifespan of the cup, including what happens after it leaves our customers’ hands,” said Ben Packard, Starbucks’ vice president of global responsibility. “This required bringing together the entire system of stakeholders with the expertise, the influence and the infrastructure to coordinate a fundamental shift, not only in our own operations, but in the entire food packaging and recycling industries.”

Corporations that haven’t optimized their approach to CSR may still be considered industry leaders. But not for much longer. CSR is already influencing how employees, customers, and stakeholders are deciding whom they’d prefer to follow. The good news is that a path to high performance CSR has been uncovered and it’s possible to follow the leaders.

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